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NEWS

Daily Tax Report: State provides authoritative coverage of state
and local tax developments across the 50 U.S. states and the District of
Columbia, tracking legislative and regulatory updates,...

Tax Policy

Bloomberg BNA recently posed a series of tax-centric questions to the Republican and
Democrat candidates for governor in Vermont. Below are the responses from Democrat
candidate Sue Minter and Republican candidate Phil Scott.

Republican Phil Scott is currently lieutenant governor, an office he has held since
2010. He was re-elected to the post in 2012 and 2014 after winning over other candidates
for the office. Previously, he was a state senator for 10 years. Scott also co-owns
DuBois Construction and is a champion stock car racer. Scott is a moderate Republican.
His campaign emphasizes strengthening the economy, slowing growth in government costs
and making Vermont more affordable to young people.

Democrat Sue Minter was head of the state Department of Transportation under current
governor Peter Shumlin (D). Shumlin also appointed Minter to lead the state’s recovery
efforts following Tropical Storm Irene. Previously, she was a state representative
for six years. Minter’s platform includes job creation, investing in housing and alternative
energy, and providing two free years of community college to Vermont high school graduates.
Minter is a career Democrat but centrist enough that Vermont Senator and former presidential
candidate Bernie Sanders (I) has endorsed her candidacy.

Editor's Note: Neither candidate responded to Bloomberg BNA's tax questionnaire that sought their
opinion about priorities on state and local tax issues, hurdles in enacting their
tax policy priorities, challenges in the tax and revenue realm facing the state in
light of market conditions and whether the state’s tax regime is properly balanced.
The following is Bloomberg BNA's coverage of their Oct. 18 debate.

Sales Taxes

“I will not increase the tax on sales or services that burden middle-class Vermonters,”
Minter said. “I’m going to support the middle class.”

Vermont has a 6 percent state sales tax, and localities may impose additional sales
taxes up to 1 percent.

Minter said that she would close “loopholes”
or exemptions in the tax code that benefit wealthy people. “I would end exemptions
for lobbyists, limousine rides, private jets and mortgage interest on second homes,”
she said. “I’m going to support the middle class in Vermont.”

Scott would oppose the expansion of the sales tax to services, and would veto such
a tax proposal if he were governor.

Scott has promised not to raise taxes that impact the middle class.

“These are difficult times for our region. Vermonters are struggling to make ends
meet,” Scott said.

Property Taxes

Both candidates agree that property taxes have been rising for the last couple of
decades. The state spent $1.6 billion on education in 2015.

At the same time, Vermont public schools, which are top-rated in the nation, have
experienced declining enrollment, from 112,000 students 20 years ago, to 86,000.

But the candidates are vague on how they would usher state resources to lower the
local property tax burden.

“We’ve heard Vermonters crying for relief,” Scott said. “I dare say we can do it differently.”

Minter has said she would work to support public schools, while stabilizing property
taxes.

Carbon Taxes

Meanwhile, the candidates also discussed a potential carbon tax, which the Legislature
briefly considered in 2015.

Scott also wouldn't support a state mileage tax, something he believes should be handled
by the federal government.

“Climate change is real and affecting our economy and we need to address it,” Minter
said. “Let’s look at why we are having 80 degree days in October.”

“Would I sign it?,” Minter said when pressed about the carbon tax during the debate.
“There is no bill in front of me to answer that question.”

Tax Reduction and Credits

The state is staring down an estimated $80 million budget gap for 2017. Scott believes
the state overspends and that government needs to be more efficient.

“Overspending is stifling our economic growth,” he said.

“I’m not advocating cuts,”
he said. “It’s all about management, leadership and living within our means.”

Scott said he would cut government waste and use the savings to lower income taxes
and business taxes, eliminate the tax on Social Security benefits for people over
65 and the tax on military retirement benefits, and provide targeted tax relief for
workers and entrepreneurs.

He said he would lower taxes incrementally, with a goal of making Vermont’s tax rates
equal to the national averages.

He would also allow manufacturers to deduct almost one-third of research and development
costs.

To contact the reporter on this story: Adrianne Appel in Boston at
aappel@bna.com

To contact the editor responsible for this story:
Ryan C. Tuck at
rtuck@bna.com

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